Planned solar project outside Mexicali would supply U.S. and Mexico

A ambitious plan to build a facility that would manufacture solar cells and generate power for both sides of the California-Mexico border was announced Monday by the Baja California government and the project’s developers.

The Taiwanese-backed project is expected to break ground in November west of Mexicali in a high-tech industrial park known as Silicon Border CleanTECH Park.

The project, known as Baja Sun Energy, would be the first in Mexico to integrate manufacturing of solar cells with energy production, said David Tenney, chief financial officer for Silicon Border. The initial phase envisions an investment of $60 million for a 10-megawatt solar farm, but within four years, the plan is to expand the energy production capacity to 100 megawatts and entail a $500 million investment.

In its initial phase, the project would produce energy for an undisclosed “Mexican entity,” said Tenney, but the plan is to develop the energy both for Mexican consumption and export to the United States.

“It’s one of the most favorable climates for producing solar power,” Tenney said. Another advantage is that the facility is located by three cross-border transmission lines near Baja California’s La Rosita switch, one of them owned by San Diego-based Sempra Energy.

California utilities are under intense pressure to shift their energy portfolios toward renewable generation like solar, wind and geothermal technology. The governor signed legislation in April requiring that one-third of retail electricity sales come from renewable sources by 2020 — one of the toughest mandates in the country.

The launch of the investment was announced Monday during a visit to Taipei by Baja California Gov. José Guadalupe Osuna Millán. The governor met with executives from Arima EcoEnergy Technologies, a Taiwanese company that has a 50 percent equity interest in the project. The company has developed solar energy projects in Spain, Taiwan and China. Silicon Border, whose corporate offices are in San Diego, holds a 25 percent interest, as does Grupo Maiz, a Mexican company.

“The financial crisis really put a stop on a great percentage of renewable energy investments,” Tenney said. “We’re feeling like we’re in a great position,” he said, with good strategic location, labor rates comparable to coastal China’s, and a skilled labor pool in Baja California.

In 2008, a German company, Q-Cells, announced a $3.5 billion plant at Silicon Border, but the project fell through, Tenney said, when a German bank withdrew the company’s line of credit during the financial crisis.

“It was as heartbreaking for us as it was for Q-Cells,” Tenney said, but he added that Bancomext, Mexico’s state-owned bank for promoting external commerce, is directly involved with Baja Sun. “We feel strongly about the project and the financial partners,” he said.

At full capacity, the facility would create 4,240 direct jobs in Baja California, though “the total supply chain will ultimately create more than 8,000 jobs for the Baja California/San Diego region,” according to statements from Silicon Border and the Baja California government.

The project would be a great boost for Silicon Border, a project developed by two entrepreneurs from Rancho Santa Fe with the vision of attracting technology companies from Asia to North America. Originally, the developers aimed to draw companies specializing in semiconductors, but more recently they have focused on renewable energy.

DJ Hill, Silicon Border’s CEO, and one of the original developers, was traveling to Taiwan on Monday and could not be reached. In a statement, Hill touted the strategic location of the park, within a day’s drive of most of the western United States.

Baja Sun Energy is a subsidiary of Silicon Border and qualifies for assistance from Mexico’s federal government. Tenney said he was not at liberty to disclose the exact amount, but said that “it is in the range of the U.S. investment tax credit,” which offers a 30 percent credit for renewable energy products.